Next government will inherit $4. 442 billion turnkey projects

Whoever takes over the reins of Panama’s government in July 2019 will have to face turnkey contracts awarded by the current administration for over  $4.442 billion.

With this contracting mechanism, the companies that execute the works contract the debt in the first instance, and the Government repays it in time, according to the progress of the project. reports La Prensa.

The Government only considers formal debt when accounts payable generated have been approved according to the progress of work, but there is also a contingent or floating debt for the rest of the contract that is about to be executed.

This portion does not appear in the debt balances published by the Ministry of Economy and Finance ( MEF ).

After a formal request for information from La Prensa, the MEF revealed the figures on  Thursday, December 13 – in a conference at the headquarters of the Foreign Ministry – that until June 2019 accounts payable fof $840 million, mainly for the design and construction contract of line 2 of the Panama Metro.

In addition, financing of projects totaling $3.billion  will be contracted and structured.

Of this total,  $2.826 billion will be for the third line of the Metro, a contract that is in an advanced stage of bidding and is expected to be awarded before the end of the  Varela administration.

The head of the MEF, Eyda Varela de Chinchilla, said that the current administration was left with many turnkey contracts with problems of execution and lack of payment, many of which had to be renegotiated.

She defended the Government ’s use of turnkey for large projects that will have a positive impact on the population and that will be executed mostly by the next administration.